Saturday, January 12, 2013

Yahoo News has released an update regarding the rumors of a cheaper iPhone in development for Chinese customers that seems to confirm that it could really be in the works. A Chinese paper printed a story on Thursday that was a revised edition of an earlier report.

The original report stated that Apple Inc. (AAPL) would not be manufacturing a less expensive model of the iPhone for its big push into the Chinese market. However, when the revised story was printed on Thursday by the Shanghai Evening News, the statements about the cheaper iPhone were completely removed, other than a brief mention that rumors had been circulating regarding the product.

The paper focused instead on Apple's marketing chief, Phil Schiller's statement that Apple would concentrate on making "the best products" for its Chinese customers, and would "never blindly pursue market share." This statement seems to indicate that the Cupertino based company may be designing a lower cost iPhone, but they would not do so in a rushed manner, simply to gain sales in China.

The development of a cheap smartphone would completely reverse the image that Apple Inc. (AAPL) has projected for itself since the advent of the iPhone. Apple has consistently catered to the upper crust of the smartphone market, with the iPhone being made available to the general public through expensive subsidies offered by wireless carriers.

Apple did confirm that the Shanghai paper had been contacted about its original story, and they had indeed been asked to amend the report. While they would not confirm or deny the existence of the speculated cheaper phone, a reporter from the paper did admit that Schiller's remarks may not have been clearly presented in the article.

The paper apparently had paraphrased some of Schiller's remarks, rather than quoting him verbatim, and in the new report, this was altered to include only exact statements made by the Apple executive. However, the reporter, identified as Huang Yinlong, said the paper had made the changes of their own free will, and Apple had nothing to do with the decision to print a revised article.

Schiller's remarks about the advent of a cheaper iPhone did not deny that such a device was in the making. He simply stated that Apple had never blindly chased market share, and they had always focused on creating only the best products for their customers. However, if they hope to reach the market in China and become the number one smartphone manufacturer in that country, they will have to reach the mid and low end of the market. To do so will require them to produce affordable handsets.

This statement could simply mean that Apple is developing a cheaper smartphone that is the best in its price range. If so, the Samsung Electronics Co. LTD (BBC94) and other competitors who run on the Android OS had better watch out. Apple has continually developed excellent products, and if they manage to bring out a cheaper iPhone model, you can bet that if its priced in the same range as the less expensive Android phones, it will offer more features. I guess we will have to wait and see.